Selling A House? Don't Overprice It.

 

There is no doubt that the housing market is coming back nicely. What, if anything, could slow down the current momentum? We believe it may be sellers’ over exuberance when it comes to pricing. There is little doubt that house prices have appreciated over the last twelve months in most regions of the country. However, with both the inventory of homes for sale and interest rates increasing, we have to be careful to not over judge what the market can bare.

Trulia just reported that asking prices have jumped dramatically and the increase is accelerating:

§ Year-Over-Year prices jumped 10.7%

§ Quarter-Over-Quarter prices jumped 4.1% (16.4% annualized)

§ Month-Over-Month prices jumped 1.5% (18% annualized)

No expert is expecting home prices to shoot up 18% in the next twelve months. If anything, price appreciation may slow as rates and inventories increase. Investors will begin to slow their purchases and the first-time buyers expected to take their place will be working within a pre-set budget in many cases.

Buyers’ Purchasing Power

Let’s look at an example: A young couple is looking for a home and have predetermined that their budget will only allow them to spend $1,000 a month on a mortgage. At today’s mortgage rate of 4.5%, they could afford a $200,000 mortgage ($1,013 principal & interest). However, if rates jump to 5%, they would have to lower their mortgage amount to $190,000 in order to keep their monthly payment where they need it ($1,020). At 5.5%, the mortgage would need to be no more than $180,000 ($1,022).

The Impact on Prices

This decrease in buyers’ purchasing power will have an impact on home values going forward. We do not believe it will cause a decrease in prices. However, we do believe it will likely cause current rates of appreciation to slow.

If you are thinking about selling your home, don’t get carried away with current headlines about home price increases that have taken place over the last twelve months. Instead, call a local real estate professional. They will be best prepared to explain where prices are headed over the next six months.

If you have any questions about the worth of your home or property, please give me a call toll free at (888) 617-7654 or send an email to joyce@intracoastalrealty.com.  I'll be more than happy to do a Market Analysis for your

Listing and Selling real estate in the Kure Beach, Carolina Beach, Wrightsville Beach and the Wilmington, NC area.

Mortgage Interest Rates: Where Are They Headed?

Today’s $20,000 question is…Where are mortgage rates headed in the near future? Most believe the rapid rise in rates experienced over the last month will not be sustained and that they will level off into a range between 4% and 5%.

When recently asked, Zillow’s director of Mortgage Marketplace, Erin Lantz suggested:

“It is impossible to predict. However, we expect there to be a lot of volatility, probably between 4.5% to 5%.”

In Bankrate.com’s Mortgage Rate Trend Index last week, 20% of the experts said rates would go up this week, 30% said rates would go down and 50% said they would remain unchanged.

What about going forward?

Doug Duncan, chief economist for Fannie Mae recently addressed where mortgage rates may eventually end up:

“I don’t think the Fed ultimately would be troubled with a 6.5% mortgage rate.”

Why wouldn’t the Fed be troubled? They have artificially kept rates low in order to stimulate the economy. As economic indicators begin to show signs of a recovery, the stimulus will be pulled back and rates will rise.

Frank Nothaft, Freddie Mac’s VP and chief economist confirms this:

“As the economy continues to improve, we expect to see continued upward movement in long-term interest rates.”

 

Buckle in!! The rollercoaster ride will probably continue.

For more information about current rates and current properties for sale in Carolina Beach, Kure Beach, Wrightsville Beach or the Wilmington, NC area, please give me a call at (910) 617-7654 or email me at: joyce@intracoastalrealty.com. 

Buying a House? 3 Reasons to Do it Now!

Here are three great reasons to consider buying a home today instead of waiting. 1.) Prices Will Continue to Rise Standard & Poors recently upgraded their 2013 forecast for the S&P/Case-Shiller Home Price Index to an 11% year-over-year increase from their original 8% projection. The Home Price Expectation Survey, which polls a distinguished panel of over 100 economists, investment strategists, and housing market analysts, projects a 22.3% appreciation in home values over the next five years. The bottom in home prices has passed. Waiting no longer makes sense. 2.) Mortgage Interest Rates Are Increasing As reported by Freddie Mac, interest rates for 30-year fixed-rate mortgages have risen about 1/2 percentage point over the past several weeks. The National Association of Realtors, the Mortgage Bankers Association and Fannie Mae are calling for interest rates to rise by approximately an additional ½ percentage point by this time next year. Some are trying to minimize the impact of higher rates. For example, Freddie Mac in their June U.S. Economic and Housing Market Outlook stated: “At today’s house prices and income levels, mortgage rates would have to be nearly 7 percent before the U.S. median priced home would be unaffordable to a family making the median income in most parts of the country.” However, an increase in rates will impact YOUR monthly mortgage payment. Whether you are moving up or moving down, your housing expense will be more a year from now if a mortgage is necessary to purchase your next home. 3.) It’s Time to Move On with Your Life The ‘cost’ of a home is determined by two major components: the price of the home and the current mortgage rate. It appears that both are on the rise. But, what if they weren’t? Would you wait? Look at the actual reason you are buying and decide whether it is worth waiting. Whether you want to have a great place for your children to grow up, you want your  family to be safer or you just want to have control over renovations, maybe it is time to buy. If the right thing for you and your family is to purchase a home this year, buying sooner rather than later could lead to substantial savings.

 

Selling a House? 5 Reasons You Should Do It Now

Many are talking about why now is a great time to buy a home. Today, we want to look at why it might also be an opportune time to sell your house. Here are the Top 5 Reasons we believe now may be a perfect time to put your house on the market. 1.) Demand Is High Homes are selling at the fastest pace since November 2009 when the market spiked in response to the home buyer tax credit. The most recent Existing Home Sales Report by the National Association of Realtors (NAR) showed that monthly sales increased 9.7% over the same month last year. Total sales have been above year-ago levels for 22 consecutive months. There are buyers out there right now (buyer traffic is 31 percent stronger than a year ago) and they are serious about purchasing. 2.) Supply Is Beginning to Increase Total housing inventory last month rose 11.9% to 2.16 million homes for sale. This represents a 5.2-month supply at the current sales pace, compared with 4.3 months in January. Many expect inventory to continue to rise as more sellers escape the shackles of negative equity. Selling now while demand is high and before supply increases may garner you your best price. 3.) New Construction Is Coming Back Over the last several years, most homeowners selling their home did not have to compete with a new construction project around the block. As the market is recovering, more and more builders are jumping back in. These ‘shiny’ new homes will again become competition as they are an attractive alternative for many purchasers. 4.) Interest Rates Are Rising According to Freddie Mac’s Primary Mortgage Market Survey, interest rates for a 30-year mortgage have shot up to 3.98% which represents a jump of more than ½ point since the beginning of the year. Even those trying to be the voice of reason on this issue are projecting higher rates. For example, Polyana da Costa, senior mortgage analyst at Bankrate.com said: “Rates are unlikely to keep going up so quickly and should remain below 5%.” Whether you are moving up or moving down, your housing expense will be more a year from now if a mortgage is necessary to purchase your next home. 5.) It’s Time to Move On with Your Life Look at the reason you are thinking about selling and decide whether it is worth waiting. Is the possibility of a few extra dollars more important than being with family; more important than your health; more important than having the freedom to go on with your life the way you think you should? You already know the answers to the questions we just asked. You have the power to take back control of your situation by putting the house on the market today. The time may have come for you and your family to move on and start living the life you desire. That is what is truly important.

 

David Flory - Comments on Our Market

Another great month. So are we headed into a Seller’s market? Let’s look at some of the numbers that help support that claim.

We have gone 7 months with our list to sales price ratio above 95%. Our April average sold price exceeded last month as well as last year by 2.8%. We have to go back to 2007 to find comparable numbers. April’s average sold price increased from March by 1.8%. On May 1^st we saw an increase of 55 homes in our listing inventory; we have 3,765 homes on the market as of May 1^st. This adjusted our month’s supply of homes for sale with just over 7.0 months. Our pending Index is approaching 1,300, the last time we were over 1,300 units was in August of 2007.

We need these numbers to go lower. In April sellers paid concessions in about 32% of the transactions, the average concession amount is $3,152. Our average days on the market increased to 136 days. The number of homes that sold in 15 days or less continues to remain very low, 11.8% of April sold homes.

The 30-year fixed-rate mortgage (FRM) averaged 3.42% with an average 0.7 points for the week ending May 9, 2013; we have stayed under 4.0% for over 1 year. With smaller inventories, sellers getting 95% of their asking price, shorter number of days that homes are on the market we should see a very good spring. It is possible that we won’t be seeing 3.25% mortgage rates again. You can see in the Mortgage rates chart that rates were at 3.40% to 3.41% toward the end of April. If you were considering buying a home now is the time as our basic factors continue to improve, this just further enhances the opportunities for buyers – great property deals as well as very attractive mortgage rates, now if ever there was a great time to buy we can say it is now. Call me so I can show you or your clients how they can get the benefit of these rates. Have a great week and let me know what I can do to help you and your clients.

Despite all the media comments about our markets we are still lending money for residential mortgages. If a client has income and credit and some sort of down payment; they can get a mortgage. It goes to the basic three C’s – Capacity, Collateral and Character.

Listing Inventory

We saw a 55 unit increase in our listing inventory for April over the month of March. We are about 329 units under May 1, 2012, down about 8.0% from last year. A year ago our average list price was $360,001 this year we are up by 2.0%. We currently have 3,765 single family homes for sale in our MLS as of May 1^st. The average list price of $367,136 is up by $9,318 from last month. January was the low point of our listing inventory and we are now in the building stage of our listings. During our Spring season we usually see big increases in our listing inventory.

 

 

 

 

 

 

 

 

Monthly Average Sold Price

April average sold price ($225,618) shows an increase of 1.8% from last month ($221,584) and up by 2.8% from April 2012 ($219,419). Our monthly average sold price is up $4,034 from last month and up $6,199 from April 2012. April average sold price is up 2.5% from our yearend (2012) sales price of $220,041.  

 

Monthly Sold Units

We are up 46 sold units from March 2013 and up 82 units from April 2012. This April we are up 9.4% in units sold compared to March 2013. This is our best April in sold units in over 6 years. Our April sold units have ranged from a low of 332 in 2009 and we had 591 units in March 2007. We continue our positive trend of upward sales.

 

Average Sold Price Year to Date

Year over year our year to date numbers have dipped a little.

2003 year end average sale price $ 186,137

2004 year end average sale price $ 210,048

2005 year end average sale price $ 254,080

2006 year end average sale price $ 264,498

2007 year end average sale price $ 273,408

2008 year end average sale price $256,510

2009 year end average sale price $235,116

2010 year end average sale price $230,459

2011 year end average sale price $221,848

2012 year end average sale price $220,041

Our current Year to Date average sold price - $220,803 about .3% up from Year End 2012.

Median Sold Price

Our Median sold price increased this month by 4.2% from last month. Our national numbers lag by one month. Our median sales price continues its jagged path. The slight decrease in our median sold price in March moves us back up based on the National Median. On a National scale the economy is trying to improve. You should also note that on a national basis the median peaked out about 2 months ago. Ours should continue to improve as we go into the spring. Last month while we decreased in our median, NAR had an increase and we carried a slight increase in April ourselves. The last 3 months we have cycled with the National Median.

 

Pending

Pending Sales – A sale is listed as pending when the contract has been signed but the transaction has not yet closed. Sales are typically finalized within one to two months from signing. I am counting Active Due Diligence and pending contracts in my total pending sales. I look at the total pending units on a regular basis and this is how they chart out. Our pending index was very consistent in 2012 with the pending index staying above 1,000 units for about 8 months. 2013 has already started strong with our pending index above 1,000 units since Feb 1^st 2013. We have had an increase in pending units of 46% since Jan 1, 2013. We crossed over the 1,200 current pending units on April 11^th. We have maintained the last 30 days with the pending index between 1,229 and currently we have 1,293 pending sales as of 5/11/13. The last time we were over 1,200 pending units was 9/6/2007. From the agents and managers I have talked with we are seeing an increase in showings and contracts, and pending contracts proves this to be accurate. Good job

 

Market Absorption rate – The number of homes sold in April, 536 divided by the current listing inventory, 3,765 gives us a 7.0 month supply of single family homes. This is a decrease of .6 months from last month. I anticipate we have a chance to see this get lower this spring. With rates where they are and plenty of inventory; we can get this number down even more. We are hearing from agents about more multiple offers as the inventory shrinks.

List to Sold price ratio – the average list price of the sold properties is $235,380 and the average sold price is $225,618 for April, which gives us a 95.9% list to sold price ratio – this is the seventh month we are above the magic 95% list to sales ratio – Great Job.

Seller Concessions – We had 32.1% of sold properties report a sales concession for April, an increase of 2.1% from last month. We want this number to go lower. The average concession was $3,152

Days on Market – The average days on market for the sold properties are now at 136 for April a 4 day increase from last month. Only 11.8% of the properties were placed under contract in less than 15 days for the month of April.

Rolling 12 months

Our rolling 12 months gives us a better look at our production. It helps to smooth out a month that jumps up and down. This is the second month our rolling numbers are ahead of last year in both units and sold price. When we look at May 1^st, 2012 to April 30, 2013 we have 5,905 sold units and when we compare the year prior May 1^st, 2011 to April 30, 2012 we have a 1,125 unit gain (4,776 sold units). When we look at the same rolling 12 months for average sold price we see that we are up by .5%. So the dates of 5/1/2012 to 4/30/2013 we have an average sold price of $222,016 while from 5/1/2011 to 4/30/2012 we had an average sold price $220,993.

Carolina & Kure Beach

There are currently 342 single family homes for sale and this represents a change of 5 units from April 1, 2013 and it represents about 9.2% of our total WRAR inventory. The average list price is $386,547 and a increase of about $10,425 from April 1, 2013. In April there were 50 homes sold, divide that by the homes available and you have an 6.8 month supply of homes in Carolina and Kure Beach. The average sold price for the month of April was $297,337 and is up by $3,283 from April 2012. Our year to date is ahead of last year this time with the average sold price of $284,376 for April 2013 and $279,802 for April 2012 a gain of 1.6%. The rolling 12 months for Carolina Beach had 393 units vs. 322 the previous year. The average sales price went up by $1,518. Good Job and it fits in with WRAR overall.

This data was pulled on May 11, 2013, based on information from the Wilmington Regional Association of REALTORS Incorporated, for the period Jan. 1, 2005 through April 30, 2013.

The Market

Mortgage Rates Edge Higher

Freddie Mac released the results of its Primary Mortgage Market Survey(R), showing average fixed mortgage rates reversing their recent trend and moving higher for the first time in six weeks amid April's better than expected employment report.

News Facts

·         30-year fixed-rate mortgage (FRM) averaged 3.42 percent with an average 0.7 point for the week ending May 9, 2013, up from last week when it averaged 3.35 percent. Last year at this time, the 30-year FRM averaged 3.83 percent.

·         15-year FRM this week averaged 2.61 percent with an average 0.7 point, up from last week when it averaged 2.56 percent. A year ago at this time, the 15-year FRM averaged 3.05 percent.

Quotes
Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac.

"Fixed mortgage rates edged up following a solid employment report for April. The economy gained 165,000 new jobs on net last month, more than the market consensus forecast and the largest monthly increase this year. On top of that, revisions added 114,000 more jobs to February and March as well. All of these factors allowed the unemployment rate to fall to 7.5 percent in April, the lowest since December 2008."

30 Year Fixed Rates

 

 

Some comments from the Peanut Gallery:

Over the last several months we have had the press telling us all about the highs and lows of the stock market, well here are other markets we have not heard much about and how they are doing.

Helium was up

Feathers were down

Paper was stationary

Fluorescent tubing was dimmed in light trading

Knives were up sharply

Cows steered into a bull market

Pencils lost a few points

Hiking equipment was trailing

Elevators rose, while escalators continued their slow decline

Weights were up in heavy trading

Light switches were off

Mining equipment hit rock bottom

Diapers remain unchanged

Shipping lines stayed at an even keel

The market for raisins dried up

Coca Cola fizzled

Caterpillar stock inched up a bit

Sun peaked at midday

Balloon prices were inflated

And, Scott Tissue touched a new bottom

 

I offer these key statistics to keep you informed as to how our market is changing. With 25 years of real estate sales and management and finance in my background I am able to evaluate the current conditions and provide you with accurate data. With key information from your clients I can evaluate their needs and offer them the best plan for their current mortgage. With our current “Buyer Ready” program we can shorten the due diligence period and take the qualifying fear away from the client. Call me today for a worksheet.

Cunningham & Company is a full service Mortgage Banker - we handle everything in house. We do first time buyers, USDA, FHA and VA loans, Conventional and Jumbo Loans, 100% financing and we have a large selection of adjustable rate loans. Call me today with my background in real estate and the resources of Cunningham & Company working together... you can't miss. A loan in the crowd.

 

 

 

David Flory NMLS #91592

 

Mortgage Consultant

Cunningham & Company Mortgage Bankers

910-352-8273 cell

910-313-0045 office

davidf@cunninghammortgage.com

www.cunninghammortgage.com

Difference Between Perfect Advice and Excellent Advice

§ An expert doesn’t mean you’re going to give perfect advice.

§ An expert means you’re going to give excellent advice.

Here’s the difference:

If you go to a doctor with a serious illness, she can’t tell you how it’s all going to wind up in the end.
She can’t know for sure. Therefore, she can’t offer perfect advice.

However, your doctor can only give you excellent advice. She can tell you about your illness and your
options, whether it be surgery or medications. She can also explain what she believes to be the best option for you based on your history, symptoms, and overall health. Ultimately, though, you’re going to make the final decision of whether you go through with the treatment plan.

Once you make that decision, your doctor will take you by the hand and walk you down the road to recovery. She will explain to you that there might be adjustments that need to be made to the
treatment plan, because no one can know for certain how things will turn out.

She might have to adjust your medications or increase or decrease your treatment schedule. But every step of the way, she’s there with you, helping you get to your ultimate goal. This is called excellent advice. Similarly, if you went to an attorney, he can’t tell you how the case is going to end up or how the judge or jury will rule. That would be perfect advice. What an expert attorney can do is explain your options. He might pick one or two he believes to be the best ones to pursue. He will then leave you to make the decision on which option you want to take. Once you decide, he will help put a plan together based on the facts at hand. He will help you get to the best possible resolution of the case. And along the way, he’ll make whatever changes are needed. This is excellent advice.

My role as a real estate professional is similar to the role of the doctor and lawyer. I can’t give
buyers or sellers perfect advice because I don’t know what’s going to happen—I can’t know the future. However, I can give excellent advice based on the information and situation at hand. I can guide you through the process and help you make the necessary changes along the way. And that’s
exactly what my clients want…and deserve!

Myths: The Earth Is Flat and Newspapers Sell Houses

It is amazing how masses of people can believe something that is absolutely untrue. The greatest example of this is that at one time the vast majority of people believed the world to be flat. Today, we want to debunk another commonly held belief – that newspapers sell houses. Somehow this notion gained believability even though the facts consistently prove it to not be true.

When you are selling your house, you should know what methods perspective purchasers use to find the home of their dreams. That would enable you to develop the best marketing strategy to attract a buyer.

Google recently teamed with the National Association of Realtors (NAR) on a new report, The Digital House Hunt: Consumer and Market Trends in Real Estate.

Let’s look at the actual search habits of today’s buyers revealed by the report:

§ 90% of buyers now begin their search for a home online

§ Real estate related searches on Google.com have grown 253% over the past 4 years

Of the 90% who use the internet, they gain information from these sources (with percentages):

§ The internet – 100%

§ A real estate agent – 89%

§ A yard sign – 53%

§ An open house – 46%

§ Print newspaper – 28%

If you want to develop a great marketing strategy giving your house maximum exposure, forget newspapers. Less than 30% of buyers will ever see your home. Instead, look toward the internet and a real estate agent.

Where on the internet should you advertise your home?

The buyer is attracted to the type of sites that have the greatest number of listings. These sites are normally generated by the real estate industry. You should make sure your home is on as many of these sites as possible. That will give you the best chance of attracting your buyer.

Bottom Line

Print media never was a great way to market a house for sale and its effectiveness is diminishing each year. Give me a call at (910) 617-7654 to discuss how we can put together an internet marketing plan for your home!